Red Ink on the Prairies

Geoff Currier and Evelyn Jacks

A day after Quebec’s Finance Minister Eric Girard brought down a Budget featuring a $6.3 Billion deficit, Saskatchewan’s Finance Minister Jim Reiter tabled his government’s budget on March 19. Next up was Finance Minister Adrian Salas, who tabled the Manitoba Budget on March 24. The common thread: there’s lots of red ink on the Prairies. But that’s where the budget documents differ between Manitoba and Saskatchewan. Here’s the latest tax news and why it matters to the advice you give your clients.

Saskatchewan (SK).  The catchy title for this budget was Protecting Saskatchewan. But, Saskatchewan was the only province which failed to build in a contingency fund to cope with U.S. imposed tariffs. A year ago, the province was predicting a small surplus of just over $12 million. Now, the projected deficit for 2026-27 is $819.4 million and the province’s gross debt is expected to be $43.5 billion.

But for context, the projected net debt as a percentage of GDP for Saskatchewan is a relatively low $16.1 Billion. The projection is that Saskatchewan will be back in balanced budget territory in four years.

Tax Breaks in Saskatchewan, Not so Much in Manitoba: Reiter’s budget does present some good news for Saskatchewan taxpayers. The basic personal exemption is going up by $500 to $20,381. According to Reiter, a family of four will pay no provincial income tax on its first $65,000 of income. 

The spousal exemption and equivalent-to spouse exemption are also rising in Saskatchewan by $500 to reach the same level of $20,381. These measures all fall under the Saskatchewan Affordability Act. There’s additional relief as the dependent child exemption is being increased by $500 to $8,358 per child and for seniors the supplementary amount will rise by $500 to $4,569. As well, all are indexed.

The tax relief doesn’t stop there, either for Saskatchewanians. The low-income tax credit is being raised by 5% in 2026 to a maximum annual benefit for a qualifying family of four to $1,282. The Volunteer First Responders’ tax credit, which is a non-refundable tax credit, is being doubled from $3,000 to $6,000 to mirror the federal credit.

By comparison, Saskatchewan’s next-door neighbour, Manitoba, has a BPE of only $15,780 and it’s frozen. And that’s a big difference  in fiscal approach: last year Manitoba de-indexed its personal amounts and tax brackets. This “bracket creep” pushes people into higher tax brackets when they get a raise, increasing the amount of tax they have to pay. In short, this reduces inflation-eroded take home pay even more. There was no indication in Sala’s budget that this hidden tax would be removed any time soon.

Manitoba did provide some tax relief to homeowners on the significant property tax increase it introduced in 2025. The Homeowners Affordability Tax Credit will give an additional $100 of relief by rising from $1600 to $1700, but not until 2027. Further, it will phase out for those with homes with assessed values over $1 Million and disappear entirely for homes over $1.5 Million.

Retail Sales Tax on Groceries & Vitamins Removed in Manitoba. Retail sales taxes have been removed on all groceries but that primarily means ready-to-eat prepared foods, platters of prepared foods such as sushi, junk foods and soda pop. Another measure removed the provincial sales tax on prenatal vitamins. Both these measures start July 1, 2026. So, no immediate affordability relief. 

Manitoba will also require all registered businesses collecting retail sales tax to remit and pay electronically starting January 1, 2028. And, it will deny retail sales tax refunds on the purchase and sale of vehicles if the taxpayer has falsified their bill of sale to enable a purchaser to pay less tax when registering their vehicle for insurance purposes.

Land Transfer Review. Manitoba has also indicated that it expects to raise $5 Million by clamping down on transactions that attempt to avoid the land transfer tax through the use of legal structures in which legal and beneficial ownership of the property are separated.

Other Administrative Measures. Manitoba will provide a mandatory pre-certification process for their Film and Video Production Tax Credit and allow for the inclusion of eligible non-resident labour costs on advanced certificates. 

Corporate Tax Changes: Aside from the requirement to e-file sales tax remittances by 2023, Manitoba made no corporate tax changes. Its Small business limit remains at $500,000 and there is no corporate tax on taxable corporate income under this level.

In SK, the small business corporate income tax rate remains fixed at 1%. Its small business limit is $600,000. As for corporation capital tax (CCT) the rate applied to financial institutions will increase to 6% as of April 1, 2026. However, CCT for Crown corporations will be reduced by .3% and the associated telecommunications surtax will be eliminated on April 1, 2027.

Business Incentives: There were no new business incentives in Manitoba’s Budget.

In Saskatchewan, the Research and Development Tax Credit (R&D) is a 10% refundable tax credit for Canadian controlled private corporations (CCCP’s). In SK, It will be doubled to cover the first $2 million of annual qualifying expenditures. This is double the previous amount of $1 million. Qualifying expenditures in excess of this limit, as well as those made by non-CCPCs, remain eligible for a 10% non-refundable credit, with total claimable credits capped at $1 million annually per corporation. Furthermore, the credit has been expanded to cover eligible capital expenditures, such as new machinery and equipment lease costs.

Agriculture is critical to the Saskatchewan economy. The Chemical Fertilizer Incentive reflects the government’s interest in this area. It is a 15% non-refundable corporate income tax credit which is applied to capital expenditures of $10 million or more for newly constructed or expanded chemical fertilizer facilities. This has been extended until December 31, 2031.

The Saskatchewan Technology Startup Incentive has been expanded to include eligible life sciences companies with the goal of broadening opportunities for innovation in economic growth. 

Some Other Positives in Saskatchewan: A recent agreement with China to reduce canola tariffs came as good news for the province. Another deal to provide uranium to India will also boost the Saskatchewan economy. 

The Bottom Line: Despite running a deficit and no prospect of a return to balance until 2030, this March’s budget is generally good news for Saskatchewan taxpayers who are seeing relief as part of the government’s four-year plan to reduce taxes. The province is experiencing encouraging levels of investment along with low unemployment and overall debt to GDP ratio.

Manitoba, on the other hand, can celebrate no tax on picking up rotisserie chicken, but on an interprovincial competitiveness scale, fell behind its western neighbor this time around.